A unique formulation of describing fluid motion is presented. The method, referred to as 'extended Lagrangian method', is interesting from both theoretical and numerical points of view. The formulation offers accuracy in numerical solution by avoiding numerical diffusion resulting from mixing of fluxes in the Eulerian description. Meanwhile, it also avoids the inaccuracy incurred due to geometry and variable interpolations used by the previous Lagrangian methods. Unlike the Lagrangian method previously imposed which is valid only for supersonic flows, the present method is general and capable of treating subsonic flows as well as supersonic flows. The method proposed in this paper is robust and stable. It automatically adapts to flow features without resorting to clustering, thereby maintaining rather uniform grid spacing throughout and large time step. Moreover, the method is shown to resolve multi-dimensional discontinuities with a high level of accuracy, similar to that found in one-dimensional problems.